//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2007] VSCA 75
Court of Appeal (Vic)
2007-05-04
BUCHANAN and ASHLEY JJA and KELLAM AJA
Original judgment source is linked above.
Practice and procedure - Case management - Proceedings struck out with a right of reinstatement - Want of prosecution - No evidence of prejudice to defendant - Prejudice not to be inferred from delay - Whether impecuniosity of plaintiff excuses delay - Proceeding reinstated.
1 This appeal is concerned with the question whether a proceeding, which has been dismissed on the Court's own motion, should be reinstated.
2 The proceeding arose from events which took place between 1991 and 24 January 1994, when the respondent re-entered premises in a shopping centre which had been leased to the appellant and in which the appellant had conducted a coffee lounge, restaurant and take-away food business.
3 The appellant was in possession of the premises pursuant to a five year lease, which commenced on 28 July 1990. On 1 February 1991 the respondent entered into possession of the shopping centre as mortgagee and became entitled to receive the rents and profits. In October or November 1991 the respondent commenced to refurbish the shopping centre, altered signs in the centre and opened a new food court. Between November 1992 and September 1993 the appellant made numerous complaints to the respondent about the effects of the refurbishment works, the alteration to signs and the opening of the new food court, claiming that the respondent had thereby interfered with the flow of customers to the appellant's businesses. The appellant's rent fell into arrears.
4 On 13 January 1994 the appellant gave notice to the lessor and to the respondent referring to arbitration a dispute arising from the disruption to the appellant's business, which, it claimed, was caused by the respondent. An arbitrator was appointed on 18 January 1994. Six days later, the respondent re-entered the premises, changed the locks and removed all the appellant's chattels, stock, plant and business records.
5 The respondent contended that, by reason of a termination of the lease by re-entry, the arbitrator had no jurisdiction. On 7 March 1994 the arbitrator made an interim award declaring that he had jurisdiction to entertain the dispute insofar as it concerned events prior to the re-entry by the respondent. The respondent unsuccessfully challenged the award in the Supreme Court. Later, the appellant decided not to continue with the arbitration. A director of the appellant, who controlled the company, one Leslie Thomas, said that he had caused the appellant to withdraw from the arbitration because the appellant and he lacked money to fund it and because the arbitrator could not deal with the entire dispute.
6 On 14 January 2000 the appellant commenced this proceeding. The statement of claim alleged causes of action which were statute barred, but also claimed that the respondent had wrongfully repudiated the lease by re-entering the premises and taking possession of the chattels of the appellant. The respondent filed a defence denying the appellant's allegations, but did not plead any positive defences. The respondent did not plead that it had any legal entitlement to re-enter the premises or take possession of the appellant's chattels. Rather, it simply denied the allegation that it "wrongfully took possession and occupation of the premises and Tenth Vandy's goods at the premises and thereafter prevented Tenth Vandy from entry, occupation and possession of the said premises and the said goods and thereby repudiated the lease".
7 In April 2000 the respondent sought further and better particulars of the statement of claim. The particulars were supplied in June 2000. In July and August 2000 the parties made discovery of documents. On 4 October 2000 the appellant inspected the documents discovered by the respondent. Negotiations to settle the dispute were held. A formal mediation took place on 20 February 2001.
8 On 18 June 2001, on the application of the respondent, a master of the Supreme Court gave judgment for the respondent against the appellant in respect of the statute barred claims and gave leave to the appellant to file and serve an amended statement of claim giving full particulars. The appellant filed an amended statement of claim prepared by Mr Thomas, containing allegations of fraud and conspiracy to pervert the course of justice and making claims which were statute barred. On 4 July 2001 the respondent applied for a summary judgment in respect of the further statute barred claims and sought to strike out the whole of the statement of claim. The following day the solicitors then acting for the appellant sought leave to cease to act, citing irreconcilable differences with Mr Thomas.
9 On 18 July 2001 a master entered judgment for the respondent against the appellant in respect of the further statute barred claims and otherwise struck out the amended statement of claim. The appellant was given leave to file and serve a further amended statement of claim. The appellant appealed to a judge against the orders of the master. On 20 September 2001 the appeal was dismissed.
10 On 9 November 2001 the solicitors for the appellant commenced to act again for the appellant and filed and served an amended statement of claim.
11 On 7 December 2001 the respondent applied for a stay of the proceedings until the appellant paid all costs which had been ordered to be paid by it to the respondent and that certain paragraphs of the amended statement of claim be struck out. On 27 February 2002 a master acceded to the application and ordered that the proceeding be stayed until the appellant paid the sum of $25,723.40 to the respondent and that certain particulars and paragraphs of the amended statement of claim be stuck out.
12 The appellant took no steps in the proceeding for the next three-and-a-half years. In the meantime Mr Thomas pursued his lawyers in the Legal Profession Tribunal.
13 By letter dated 3 April 2003 the Prothonotary informed the appellant's solicitors that, as there had been no action in the proceedings for some time, it would be referred to a judge in the Practice Court with a request to make orders that the proceeding be dismissed unless a notice of discontinuance was filed or orders were made in the proceeding by consent. The solicitors forwarded the letter to Mr Thomas together with a notice that they no longer acted for the appellant. On 9 April 2003 Mr Thomas wrote to the Prothonotary stating that an appeal had been lodged with the Legal Profession Tribunal. On 10 July 2003 the Prothonotary again wrote to the appellant's solicitors stating that their notice of ceasing to act was invalid as leave of the Court was required. The Prothonotary wrote to Mr Thomas informing him that the proceeding would be referred to a judge with a request to order that the proceeding be dismissed. Mr Thomas took no action in respect of the letter and on 22 August 2003 Bongiorno J ordered that the proceeding be dismissed, with a right of reinstatement.
14 In April 2004 Mr Thomas found another solicitor to act for the appellant, but he was not able to take any step in the proceeding at that time due to the impecuniosity of himself and the appellant. Later, Mr Thomas borrowed money and obtained a bank cheque for the amount of the costs ordered by the master with the accompanying stay. The cheque became stale, for the appellant had no funds to enable it to continue the proceeding.
15 On 22 August 2005 the appellant applied to a master to have the proceeding reinstated. That application was refused on 3 October 2005. The appellant appealed against that order. A judge in the Practice Court ordered that the further hearing of the appeal be adjourned on condition that the appellant pay the amount of the stay. The appellant did not pay the amount but instead abandoned the appeal.
16 On 23 December 2005 the appellant made a second application to a master to reinstate the proceeding and sought leave to amend the statement of claim. The senior master adjourned that application and ordered that, unless the appellant tendered to the respondent the bank cheque for the stay amount, the application would stand dismissed. The stay amount was paid.
17 The senior master heard and dismissed the second reinstatement application. He determined that the application was an abuse of process. The appellant appealed to the judge in the Practice Court. The judge held that the second reinstatement application was not an abuse of process and gave leave to the appellant to file and serve a further proposed amended statement of claim.
18 The appellant filed and served a proposed further amended statement of claim alleging that the respondent re-entered the premises when the appellant was in arrears of rental by reason of the conduct of the respondent, constituted by the refurbishment works, new signs and the opening of the new food court. The appellant alleged that the re-entry by the respondent was, inter alia, an unconscionable exercise of a legal right. Alternatively, it was alleged that the appellant was entitled to compensation, which was to be set off to negate any liability for unpaid rent. Accordingly, it was alleged that the re-entry by the respondent constituted a repudiation of the lease, which had been accepted by the appellant and which had resulted in loss and damage to the appellant. Claims in detinue and conversion were also made in respect of the appellant's chattels which had been seized at the time of re-entry.
19 His Honour refused to reinstate the proceeding, for he concluded that, if it was reinstated, it would be "the subject of a successful application to dismiss for want of prosecution."
20 The trial judge held that the proceeding would be dismissed for want of prosecution because two criteria were met: There had been inordinate and inexcusable delay on the part of the plaintiff or its lawyers and that delay would give rise to a substantial risk that it was not possible to have a fair trial of the issues in the action or was such as was likely to have caused serious prejudice to the respondent.[1]
21 Without identifying the length of the delay or when it occurred, the trial judge characterized it as inordinate and inexcusable. It appears that the appellant conceded that there had been inordinate delay and sought to excuse it as the consequence of the appellant's impecuniosity and the fault of its lawyers. His Honour decided the question by holding that neither factor could excuse delay.
22 As to prejudice, the respondent did not lead any evidence that, by reason of the delay, it was handicapped in defending the proceeding. It did not establish, for example, that documents had been lost or that there were witnesses who had died or could not be found or could not recall the events which were in issue. The trial judge inferred the existence of prejudice from the passage of time. The proceeding concerned events that occurred between late 1991 and early 1994. It would be unlikely to be tried before the expiration of another year. His Honour said:
"I am of the view that, notwithstanding the lack of direct evidence of prejudice, the stage has been reached in this case where the likely trial date is such that a fair trial will not be possible, or at least there is a substantial risk that this is so, with the effect that prejudice has, or is likely to have been, caused to the defendant."
23 The proceeding was instituted nearly six years after the accrual of the causes of action based upon the respondent's re-entry and taking possession of the appellant's chattels. While the lapse of time before the commencement of an action within the limitation period cannot of itself constitute inordinate delay, a plaintiff who waits until close to the expiration of the limitation period runs the risk that any later delay may be more readily regarded as inordinate.[2]
24 The delay that occurred from at least the end of 2000 until August 2005 appears to have been principally due to the appellant's impecuniosity and its difficulty in formulating a statement of claim. In Tsolakkis Nominees Pty Ltd v Low and Duff (Developments) Ltd,[3] Beach J held that impecuniosity of the plaintiff was no excuse for delay. On the other hand, in Imaging Applications Pty Ltd v Sun Alliance Australia Ltd,[4] Hedigan J took impecuniosity into account. While generally, impecuniosity will not wholly excuse delay, in my view it does place delay in context and bears upon the blameworthiness of the plaintiff. In the present case I think it is relevant that the events of which the plaintiff complains in this proceeding brought about the close of the appellant's business.
25 The appellant must accept a measure of blame for the delay. On the other hand, in my view it is not irrelevant that, in February 2002, the respondent obtained a stay which lasted for nearly three years and that the respondent's failure to plead that it was entitled to re-enter the premises and determine the lease by reason of the appellant's failure to pay rent contributed to the appellant's pleading difficulties.
26 The delay in prosecuting a case, for which a plaintiff is responsible, may be so long that prejudice is to be inferred without any evidence.[5] Whether the inference should be drawn will depend upon the nature of the proceeding. In particular, the effect of the passage of time upon the ability of parties to assemble and lead evidence will depend upon the issues in the litigation.
27 In the present case, the resolution of the issues did not depend upon the recollection of witnesses of events such as conversations or negotiations or impact between moving objects. Rather, the case turned upon facts which, it was to be expected, were recorded in documents. The works the subject matter of the refurbishment of this shopping centre, the alteration to signs, the establishment of the new food court, the takings of the appellant's business and the effect upon the trading by other shops in the centre of general economic conditions were not to be established by the recollection of witnesses but by the contents of plans, permits, memoranda, correspondence, books of account and other documents.
28 The appeal is against the exercise of a discretion. Accordingly, the appellant must establish that the exercise of the discretion has miscarried. As Wilson and Dawson JJ said, in Norbis v Norbis,[6] "A mere preference for a different result is, as the authorities constantly reiterated, an insufficient basis for interference with the exercise of the trial judge's discretion."
29 In my opinion, in this case the trial judge acted upon a wrong principle and failed to take into account a material consideration[7] in failing to address the question of the existence of prejudice which was attributable to the delay for which the
appellant was responsible, and which the respondent was required to establish. His Honour appears to have made the mistake identified by Hedigan AJA in Spitfire Nominees Pty Ltd v Ducco[8] in that he -
" ... simply grossed up the period of delay as elapsed time, instead of, as was the judicial obligation, considering what the net delay occasioned was and what prejudice, if any, was sustained as a consequence of that, rather than the elapsing of time."
30 There was no evidence that the delay for which the appellant could be blamed prevented or impeded a fair trial. Further, in the circumstances of this case, I do not consider that the mere lapse of time since the occurrence of the events the subject matter of the proceedings is likely to have effected the respondent's ability to present its defence to the appellant's claims.
31 For the foregoing reasons I am of the opinion that the proceeding, if reinstated, should not be struck out for want of prosecution. Accordingly, I would allow the appeal and, in the exercise of this Court's discretion, order that the proceeding be reinstated, for there do not appear to be any other circumstances that tell to the contrary.[9]
[1] See Department of Transport v Chris Smaller Transport Ltd [1989] 1 AC 1197 at 1283 per Lord Griffiths.
[2] Latrobe Country Co-op Ltd v Smith [1998] VSCA 74; [1999] 1 VR 440 at 445-6 per Phillips JA; Bishopsgate Insurance v Deloitte Haskins [1999] 3 VR 863 at 874-5 per Tadgell and Ormiston JJ.
[3] Unreported, 20 March 1998.
[5] Bishopsgate Insurance v Deloitte Haskins, above, at 875 per Tadgell and Ormiston JJ. And see McKenna v McKenna [1984] VicRp 58; [1984] VR 665; Hipworth v Powell, unreported, 8 February 1989, McGarvie J.
[6] (1986) 161 CLR 512 at 535.
[7] House v R [1936] HCA 40; (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ.
[8] [1998] 1 VR 242 at 248.
[9] See Caruso v Jafer unreported, 18 June 1998, Mandie J.
Tenth Vandy Pty Ltd
Natwest Markets Australia Pty Ltd [2007] VSCA 75
(1986) 161 CLR 512
(1936) 55 CLR 499